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5.Troubled companies

This category contains 270 posts

3 Dec 2019 (AFR) – AustralianSuper stares down shorts on Syrah

(3 December 2019, AFR, p14, Peter Ker, Resources reporter) ‘Australia’s biggest superannuation fund says the investment thesis that attracted it to Australia’s most shorted stock remains intact, in a major vote of confidence for struggling graphite producer Syrah Resources. Syrah shares have fallen by 94 per cent since June 2016 and its ability to outlast … Continue reading

29 Nov 2019 (AFR) – Retail bricks and mortar: Womenswear retailer Bardot joins fashion victims

(29 November 2019, AFR, p19, Sue Mitchell, Senior Reporter) ‘Fast fashion retailer Bardot has become the latest victim of weak retail spending and increasing competition from global and online retailers, falling into administration on Thursday. Brendan Richards and Ryan Eagle of KPMG were appointed voluntary administrators and have appointed Deloitte Corporate Finance to look for … Continue reading

27 Nov 2019 (AFR,WashPost) – Malls are dying. The thriving ones are spending millions to reinvent themselves.

(27 November 2019, AFR, p34, By Abha Bhattarai) ‘Abdul Mannan was perched on a stool, scrolling through his phone, on a recent afternoon at Lakeforest Mall in suburban Washington. He was two hours into his shift at a jewelry kiosk and had yet to exchange words with a single customer.’ <snipped…> ‘… But in the … Continue reading

19 Nov 2019 (AFR) – Prospa hammered on earnings downgrade – slumps 27pc

(19 November 2019, AFR, p11, James Eyers, Senior Reporter) ‘Prospa’s largest shareholders say the small business lender’s shock earnings downgrade five months after listing is a major disappointment, but its strategy to chase higher quality customers – which hit its revenue margin in recent months – will ultimately make it a stronger company. Prospa shares … Continue reading

14 Nov 2019 (AFR) – Failed company case study: Former RCR boss counts on ‘honest’ defence

[COMMENT: This is a case study example of a listed public company that went belly up, and the share market investors lost all of their investment. Caveat Emptor. Investors need to watch out for the tell-tale signs and bail out in advance. The signs are often there in the share price chart – see adjacent … Continue reading

25 Oct 2019 (AFR) – IPO performance: Ten years on the Myer float still rankles

(25 October 2019, AFR, p8, Sue Mitchell, Senior Reporter) ‘Why are some shareholders willing to forgive and forget when companies fail to achieve profit guidance, while other shareholders take them to court to recover losses? In the case of Myer, shareholders are still rankled over the circumstances behind the department store chain’s $2.3 billion initial … Continue reading

25 Oct 2019 (AFR) – Business backs away from Hong Kong

(25 October 2019, AFR, p2,  Jennifer Hewett, Columnist) ‘The protest movement in Hong Kong may have badly embarrassed Beijing and further undermined the image of Chinese President Xi Jinping. But it won’t succeed in its aim of evading China’s uncompromising assertion of its authority – sooner or later. What the protesters have clearly achieved, however, is … Continue reading

25 Oct 2019 AFR) – Don’t crash for me Argentina

(25 October 2019, AFR Review supplement, p1, Michael Stott and Benedict Mander) ‘The victor of this Sunday’s election in Argentina will inherit one of the world’s most unenviable economic messes. Inflation is running at 55 per cent a year, the economy is in a deep recession, poverty is rising, billions of dollars have fled the … Continue reading

23 Oct 2019 (AFR) – Case study: Judge takes three years to write Babcock judgement

[COMMENT: Just for the record, here is a follow up to, and a re-cap of, the disastrous affairs regarding the failure of Babcock and Brown during the GFC. This is a good example of a large well-respected company that some investors thought was blue chip and could not fail, and in which they left their … Continue reading

17 Oct 2019 (AFR) – Changing delivery demands put retail sites at risk

(17 October 2019, AFR, p28, Michael Bleby, Senior Reporter) ‘Retail landlords face the prospect of more tenants going to the wall as online sales grow faster than many retailers can reconfigure their sites to respond, rendering stores unprofitable and making them likely to close, consultancy EY warns. Online will account for 19 per cent of … Continue reading

16 Oct 2019 (TheAge) – ASX falls after earnings warnings from retail stocks

(16 October 2019, The Age, Business, p31, By Lucy Battersby) ‘Unexpected profit warnings from consumer-facing companies led to dramatic falls on the stock market on Tuesday with Southern Cross Austereo dropping 18.6 per cent on a weak advertising market and Nick Scali furniture falling nearly 14 per cent due to fewer customers and lower sales. … Continue reading

16 Oct 2019 (AFR) – Investors in consumer stocks brace for profit warnings

(16 October 2019, AFR, p1, Sue Mitchell and Natasha Gillezeau) ‘Investors in stocks exposed to discretionary spending are bracing for a series of profit warnings amid growing evidence record low interest rates and tax cuts have failed to convince shoppers to pry open their wallets. The consumer malaise struck furniture retailer Nick Scali and radio … Continue reading

15 Oct 2019 (AFR) – Indian property slump leaves banks exposed

(15 October 2019, AFR, p42, Nupur Anan and Swati Bhat) ‘India might have thought the worst of a bad loans crisis was past, but a severe cash crunch in the real estate industry could augur fresh strife for its banks. A slump in the residential property market is leaving many builders struggling to repay loans … Continue reading

1 Oct 2019 (AFR) – Forever 21 latest retailer to file for bankruptcy

(1 October 2019, AFR, p19, Rama Venkat) ‘Fashion retailer Forever 21 Inc filed for bankruptcy on Sunday, as it joined a growing list of bricks-and-mortar groups that have succumbed to the onslaught of e-commerce companies such as Amazon. Since the start of 2017, more than 20 US retailers, including Sears Holdings Corp and Toys ‘R’ … Continue reading

9 Sept 2019 (AFR) – Boom times tipped for corporate undertakers

(9 September 2019, AFR, p3, Patrick Durkin, BOSS Deputy Editor) ‘Corporate undertakers are predicting boom times ahead as retailers and property developers battle a slowdown in household spending. Over 8100 companies appointed outside administrators last financial year, according to the corporate regulator, the highest levels since 2016. Industry research undertaken by KordaMentha has found access … Continue reading

5 Sept 2019 (AFR) – Retail, Fashion: Karen Millen winds down in Australia

(5 September 2019, AFR, p19, Sue Mitchell, Senior Reporter) ‘British-based fashion retailer Karen Millen is withdrawing from Australia, joining a growing list of retailers that have collapsed or shut up shop in the last 12 months. Karen Millen, which went into administration in the UK last month, has appointed Richard Hughes, Tim Norman and Michael … Continue reading

30 Aug 2019 (AFR) – Judge paves way for Trans-Tasman court over broker collapse

[COMMENT: What happens when our stock broker goes belly up?] (30 August 2019, AFR, p39, Michael Pelly, Legal Affairs Editor) ‘Federal Court judge Jacqueline Gleeson has paved the way for a historic joint sitting of New Zealand and Australian courts to handle the liquidation of a stockbroker. Justice Gleeson said the bid to sort through … Continue reading

29 Aug 2019 (TheAge) – Construction hits recession territory in threat to national economy

(29 August 2019, The Age, p9, By Shane Wright and Eryk Bagshaw) ‘The residential construction sector is facing its deepest contraction since the GST was introduced, dragging down the overall economy amid warnings that fast-tracking national infrastructure has now become urgent. The Australian Bureau of Statistics on Wednesday revealed overall construction across the economy fell … Continue reading

6 June 2019 (AFR) – Building insolvencies surge as housing turns

(6 June 2019, AFR, p29, Michael Bleby, senior Reporter) ‘Building industry insolvencies have risen to a four-year high in NSW and are approaching historical highs nationally, prompting subcontractors to demand protection of unpaid payments in an industry estimated to leave an unpaid $3 billion-worth of bills each year. Corporate regulator ASIC figures show NSW building … Continue reading

21 March 2019 (TheAge) – Big dry: $500m wiped off Nufarm as drought takes its toll

(21 March 2019, The Age, Business, p22, by Darren Gray) ‘More than $500 million was wiped off the value of the agribusiness Nufarm on Wednesday as it swung to a first half loss, suspended its interim dividend and revealed that its performance had been crunched by severe drought in eastern Australia.’ Read more at TheAge.com.au

15 March 2019 (AFR) – Parly report raises claims of insider trading at Retail Food Group

(15 March 2019, AFR, p17, Carrie LaFrenz and Luke Housego) ‘Retail Food Group has damaged the reputation of the entire franchise industry, according to a final parliamentary inquiry report that recommended the corporate and competition watchdogs and the tax office investigate behaviour including possible insider trading, breaches of market disclosure obligations and tax avoidance. The … Continue reading

14 March 2019 (TheAge) – $20 million missing: Broker’s client money used to cover losses

(14 March 2019, The Age, Business, p26, By Sarah Danckert) ‘One of Australia’s largest brokers, Halifax Investment Management, is set to head into liquidation after administrators discovered that some of the $210 million of client money was used to cover off losses on bad bets on investment products by other clients. Investigations by administrators from … Continue reading

13 March 2019 (AFR) – The final kick in Shoes of Prey collapse for Blue Sky backers

(13 March 2019, AFR, p16, Jonathan Shapiro) ‘Investors in a Blue Sky fund that backed start-up Shoes of Prey are set to lose all their money, including a portion of the $1 million in management fees that were paid five years in advance. On Monday, Blue Sky told investors in its Blue Sky Private Equity … Continue reading

7 March 2019 (AFR) – Glimmer of hope as Myer profit rebounds – Slashes and shuts its way back to profit

(7 March 2019, AFR, p1 and 11, Sue Mitchell) ‘Myer chief executive John King warns revenues will be “lumpy” over the next year but Australia’s largest department store chain can grow earnings nevertheless by cutting costs and abandoning profitless sales. Mr King has given Myer’s long-suffering shareholders a glimmer of hope that the 119-year-old chain … Continue reading

25 Feb 2019 (AFR) – Kraft Heinz shares dive 27 pc and shake confidence across the sector

(25 February 2019, AFR, p19, by Alistair Gray and Leila Abboud) ‘Shares in Kraft Heinz dived 27 per cent on Friday as Wall Street reacted with alarm to a “disastrous” update in which the company took a $US15 billion writedown and disclosed it was the subject of a probe by the Securities and Exchange Commission … Continue reading

20 Feb 2019 (AFR) – SeaLink’s Captain Cook Cruises hits choppier waters

(20 February 2019, AFR, p23, by Simon Evans) ‘The broad economic slowdown has extended to Captain Cook Cruises on Sydney Harbour and in Perth, with operator SeaLink Travel Group saying tighter consumer spending in the domestic market and a softening of some international tourist markets is crimping growth on those tourist-focused vessels.’ Read more at … Continue reading

19 Feb 2019 (AFR) – Bingo downgrades profit 20pc due to apartment building slowdown

(19 February 2019, AFR, p15, by Simon Evans) ‘Investor confidence in waste management group Bingo Industries has been shredded after the company cut its profit forecasts by up to 20 per cent just three months after re-assuring investors at its annual meeting that a downturn in construction wouldn’t hurt its outlook. Bingo shares tumbled by … Continue reading

19 Feb 2019 (TheAge) – Bin baron loses $100m in one day in big dump

(19 February 2019, The Age, p24, by Nick Toscano) ‘… on Monday, the company became something of a share-market dumpster fire. Shares in Bingo Industries fell nearly 50 per cent by the end of the day, wiping $658 million from the company’s market value. ‘ <snipped…> ‘Investors savaged the stock after Mr Tartak told them … Continue reading

13 Feb 2019 (TheAge) – Nearly $60 million in customer money mixed up at collapsed broker

(13 February 2019, The Age, Business, p25, by Sarah Danckert) ‘Administrators picking through the wreckage of one of the country’s largest online broking houses Halifax Investment Services, have found that $57 million in money invested by clients has been mixed up with funds belonging to the company. Halifax collapsed before Christmas, freezing $210 million invested … Continue reading

6 Feb 2019 (TheAge) – Hayne report kicks true reform down the road … again

[COMMENT: Here is a good summary of financial institution disasters in recent years, including the highlighted ones below. But why do they continue to happen, almost cyclically?] (6 February 2019, The Age, p21, by Andrew Linden and Warren Staples) ‘Every 10 to 15 years it’s the same. Since financial deregulation in the 1980s, we’ve had … Continue reading